August 12, 2009

Florida hits a population wall

Most economic forecasters expect Florida's population dip to be
short-lived. Scott Brown, chief economist for Raymond James Financial
in St. Petersburg, sees it as a one-year anomaly. But it's a stunning
one in a state that has been so reliant on surging population.

"We used to say the growth industry in Florida has been growth, kind of as a joke," he said.

In a state with no income tax, state and local governments
count heavily on migrating retirees to boost revenue and create jobs.
In fact, the lack of an income tax is part of the allure.

The recession-fueled collapse of stock prices last year
stopped some of that. Retirees wanting to move to Florida either
couldn't sell their homes up north or lacked a mortgage down payment
after investment accounts took a pounding.

"That engine shuts off and you wonder where you're going to
raise funds. There's no state income tax you can tweak. You can cut,
cut and cut till people get fed up," Brown said.

The estimate of a 50,000 drop in population from April 2008 to April 2009 comes from the University of Florida's Bureau of Economic and Business Research, which tracks building permits and the opening/closing of electric company accounts.